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IBM bought Red Hat amounting to a total of $34 billion

On Sunday, Oct. 28, IBM Corp announced the acquisition of Red Hat Inc. for a total of $34 billion including its debt.

International Business Machines Corporations (IBM) was an information technology company that manufactures and markets computer hardware, middleware and software, and provides hosting and consulting services in areas ranging from mainframe computers to nanotechnology. It was also a major research organization. IBM was nicknamed “Big Blue” in part due to its blue logo and color scheme.

IBM has continually shifted its business mix by commoditizing markets focusing on higher-value, more profitable markets. Just on Sunday, the company acquired Red Hat Inc., a software company providing open-source software products to the enterprise community.

The acquisition was said to be IBM’s biggest acquisition. IBM is hoping that the deal will help them catch up with Amazon.com Inc., Alphabet Inc. and Microsoft. The combination of the two companies is aimed to create leading hybrid/multi-cloud provider.

IBM agreed to buy Red Hat for a total of $34 billion. It will pay Red hat $190.00 per share in cash. Both companies will continue to build and enhance Red Hat’s partnership, including companies with major cloud providers such as Amazon Web Services and the like.

Jim Whitehurst, President and CEO of Red Hat will be joining IBM’s senior management team but will still lead his current team. He will be reporting to IBM’s chairman and CEO – Ginni Rometty.

According to Rometty, the acquisition changes everything about the cloud market and Red Hat will be their game-changer. She also said that IBM will become the #1 hybrid cloud provider to offer companies an open cloud solution.

IBM will remain committed to Red Hat’s open governance, open source contributions, participation in the open source community and development model, and fostering its widespread developer ecosystem.